7 Lessons Learned From Crashing My First Startup

This was how I introduced myself after launching my first startup not long after completing the National Youth Service Corp program in the summer of 2012 in Nigeria. Prior to that, I had been writing about the Nigerian technology ecosystem when it dawned on me to go from writing stories to becoming part of the story.

As fate would have it, a classmate from my time at the University of Lagos, Deji Opoola, reached out with the idea that first became LazyAppetite before re-branding to EasyAppetite. It was indeed a roller-coaster experience with many ups and downs, but ultimately a learning experience I have come to cherish.

Here I share the good, bad and ugly that came out of failing at Nigeria’s first online takeaway site.

The Good

1. Trend watching and first mover advantage

The big e-commerce wave hit Nigeria about three years ago with the entry of Rocket Internet companies like Sabunta and Kasuwa that later merge to become today’s Jumia, as well as Sim Shagaya’s DealDey and Konga. These businesses paved the way for an online retail culture in Nigeria and it was not at a cheap price.

As a result of this, it became common place to buy electronics, books, and clothes online. This was the new trend we spotted before launching a food vertical. It was a no-brainer as it was all about creating an online marketplace where supply met demand, and so we hit the road, pitched to over 50 restaurants and signed up 10 to launch LazyAppetite.com.

Having seen the radical nature of other Rocket Internet companies, not to talk of getting an email notification of their CEO working his way through our system, we knew we could not go dollar to dollar against these deep pocket and mailing list hungry folks.

Our first mover advantage was going down the drain so we decided to go after a niche student market as well as sign up exclusive deals with restaurants in the Yaba-Akoka area with our biggest score being the famous White House.

We also focused on having the best customer service available as that was were many dropped the ball.

3. Restaurant acquisition and on-boarding strategy

Remember I mentioned we pitched to about 50 restaurants and only launched with 10 of them. This was because many were skeptical, overly cautious, or just didn’t want to disrupt their current business process.

This birthed a 3-level strategy that got us to 100 restaurants within the first year.

Level 1: We waived the usual 15% commission for pre-launch restaurant partners for the first 3 months. This way there was no hesitation in terms of revenue share and we had room to prove ourselves.

Level 2: Updated our pitch deck with a final slide with all 10 restaurant logos and let FOMO take its course. This got us past the 50 restaurant mark.

Level 3: Share growth figures from successful partner restaurants.

The Bad

4. Gave equity to all and sundry

EasyAppetite had five Co-founders at the time we decided to turn off the lights.

One founder had the idea, I then joined to validate the business model, we later got two more founders to build the product, and a final founder to help manage all our processes.

Don’t get me wrong, from a functional point-of-view having a team of 5 was solid, but if I was to do it again maybe it’d just be 2 co-founders and 3 first-hires who’d get a reasonable amount of equity, nothing close to the 35% that had to be let go.

5. Little to no advise from Subject Matter Experts

I sometimes refer to EasyAppetite as my trial-and-error startup. There was a lot of guess work which should not to be confused for taking risk, as well as impulsive decision which is not the same as going with your guts.

This was a first time at the rodeo and we hardly knew when to use our heads or hearts. Perhaps if we talked more to experts, sought advise from successful entrepreneurs, gotten Sim Shagaya on our board, we’d have been better off. It’d be stupid to attribute failure solely on lack of advice but then again there is safety in the multitude of counsel.

The Ugly

6. Messy book keeping brings about trouble

After all said and done, beyond passion, team and customers acquired, success in the business world is down to numbers reflecting cash in the bank.

While it’s not advisable to be metrics-crazy at the early stages, having a finger on revenue and expenditure is what separates a startup from a project.

At EasyAppetite we pooled together the starting capital in bits and bobs that it became impossible to tell how much had gone into the business. Our books was very messy from day 1 so much so it was hard to tell how much revenue we got from commissions, harder to figure out how much had gone into the business, and hardest to come to a valuation for a possible exit.

7. Trading the edge for the easy road

Someone once defined entrepreneurs as those who jump off a cliff before starting to build a parachute. Entrepreneurship is for the crazy, resilient, hard-headed, doers, and for those who live on the edge.

We started right when we launched Nigeria’s first online takeaway site and called it LazyAppetite but after a while we left the edge for the easy road – re-branded to EasyAppetite so as not to offend an adult demography, gave away chunks of equity for quick wins, not to mention never actually giving 100% to the venture – all recipes for failure.

This is neither a postmortem nor is it a lamentation. I am ever thankful for the opportunity to take a first plunge at startups with all I worked and engaged with during my spell at EasyAppetite. I only hope these lessons are of value to other entrepreneurs out there about to launch their first, second, or umpteenth startup.

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